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Lawmakers Scramble To Amend Bills For Specialty License Plates

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SACRAMENTO (AP) — California lawmakers trying to establish new specialty license plates this year said Wednesday they are moving quickly to amend their bills and enact safeguards to ensure the money is spent as promised after an Associated Press investigation raised questions about oversight of the program.

Several lawmakers said they are changing their bills to include regular audits as a way to assure the public that the extra fees drivers pay for the specialty plates are going to the right place. Some also are calling for ongoing oversight of all the specialty license plate funds and say the state should return the millions it has borrowed from one of them.

A key lawmaker leading a transportation committee said he plans to hold legislative hearings to examine the program.

Brown on Tuesday ordered an audit of California’s specialty license plate program after a review by the AP found there was little oversight of the $250 million raised in the 20 years since the Legislature authorized it.

“I’m going to support maximum transparency and accountability,” Assemblyman Jared Huffman said in an interview on the floor of the Assembly. “I saw that the governor’s calling for an audit, and that’s great. Let’s make sure we’re keeping faith with the voters and whoever buys these license plates.”

The San Rafael Democrat is leading a high-profile effort to create a new license plate that would help the financially embattled state Department of Parks and Recreation, which is trying to avoid the closure of dozens of state parks because of the state’s ongoing budget deficits.

Organizations and agencies participating in the specialty plate program must report annually to the state Department of Motor Vehicles about money collected and the percentage spent to promote the specialty plates, which isn’t supposed to exceed 25 percent of the revenue.

Other than that, there is no direct oversight. The nonpartisan Legislative Analyst’s Office has never examined the program, nor has the independent state auditor’s office.

The AP also found questionable use of millions of dollars raised from the sale of special memorial license plates created in the wake of the 2001 terrorist attacks. Brown and former Gov. Arnold Schwarzenegger had taken $3 million from that fund to help close state budget deficits. The money was supposed to provide college scholarships to children whose parents perished in the attacks and help law enforcement fight threats of terrorism, yet only a fraction ever went to scholarships and millions funded operations that have little to do with directly fighting terrorism.

Assemblywoman Susan Bonilla, who is carrying a bill that would increase fees for all veteran’s license plates and create a new “support our troops” variation, said she is looking for a way to add an oversight mechanism by amending the bill in the Senate. Money from these plates is supposed to go to county veteran service offices.

“It would be deeply disturbing to think that that money wasn’t reaching veterans directly,” the Concord Democrat said during an interview on the Assembly floor. “When you consider the sacrifice veterans have made, we need to do everything to ensure that the small amount of money that people are designating for their help should reach them.”

In the Senate, Sen. Doug La Malfa, D-Willows, has written a bill that would allow California drivers to buy special eight-character vanity plates, with a portion of the additional fees going to open-space preservation. He called the raid on the memorial license plate fund “shameful” and said it could dampen enthusiasm for future specialty plates.

“When the state just flat mugs the fund, it’s a betrayal and it doesn’t keep the faith that the people expected,” he said. “If people hear this story, they’re going to be much more skeptical.”

Specialty license plate sales have been declining since the recession began. Californians bought or renewed about 380,000 of the plates in 2011, 10 percent fewer than in 2009.

La Malfa and Sen. Mark DeSaulnier, D-Concord, called the Department of Finance audit a good start but said the nonpartisan Legislative Analyst’s Office or the independent state auditor’s office would be better suited to the job. The finance department is part of the governor’s administration.

DeSaulnier, chairman of the Senate Transportation and Housing Committee, said he will send a letter to Brown and is likely to include the issue in oversight hearings this winter.

“There needs to be proper oversight,” DeSaulnier said. “These are large amounts of money that needs to have proper oversight and a second set of eyes, and I’m pleased with the administration looking into it, and we’ll partner with them.”

Huffman said the $3 million taken by Brown and Schwarzenegger money should be paid back, but only once the state budget crisis has passed.

“Tough decisions on cash flow have to been made in a crisis, but over time, we’re going to honor that obligation to the dollar,” Huffman said.

Assemblyman Mike Gatto, who is carrying a bill that would let car enthusiasts pay extra for retro “legacy” California license plates, also said he was worried about the ramifications of the AP examination. His bill directs the license plate revenue directly to the Department of Motor Vehicles.

When he introduced his legislation on the Assembly floor Wednesday, the Los Angeles Democrat emphasized that the program would not benefit any special funds. The bill passed unanimously.